Amazon drives 80% of US e-commerce
Amazon’s gross merchandise value this year is on pace to rise 29% year over year to $258.22 billion, blowing past past total U.S. e-commerce growth of 16% expected for the year, according to eMarketer. Prime Day will only accelerate that, with eMarketer forecasting participation by U.S. Prime members to rise 12.5% to 58.7 million households and 109.5 million users.
Amazon has double-digit U.S. e-commerce market share across every product category, according to eMarketer tracking, with the fastest-growing ones this year expected to be food and beverage, apparel and accessories and health, personal care and beauty.
But retailers are fighting back. Electronics retailers in particular this year have increased assortments by 30%, and since the beginning of June their average discount per product has widened by four points, from 32% to 36%, according to research from LovetheSales.com emailed to Retail Dive — even Apple boosted discounts by 24%. Last year, by contrast, the volume of discounted products in June was flat, according to that study.
Amazon's dominance of U.S. e-commerce is particularly stark when viewed in terms of gross merchandise value, as presented by eMarketer, because it includes revenue like the fees collected from its marketplace sellers, which are responsible for half the goods sold on the site.
Given its size, the number cited by eMarketer likely also includes the company's highly profitable cloud services unit AWS and/or advertising proceeds. A request from Retail Dive regarding the provenance of the firm's forecast for $258.22 billion in GMV for the year wasn't immediately returned.
What we do know is that Amazon's net sales last year reached $177.9 billion. But just $79 billion of that were what most would define as retail sales, which includes Amazon's own retail operations, marketplace and Amazon Fulfillment services, notes retail analyst Nick Egelanian, president of retail development consultants SiteWorks. "Only Amazon Retail represents true retail sales by Amazon," he said in an email to Retail Dive.
And while Egelanian has no quarrel with eMarketer's prediction that Prime Day will goose Prime membership by 12.5% this year, that doesn't take away from the fact that, as he sees it, U.S. Prime membership is reaching saturation.
The expansion of the event from 30 hours last year to 36 this year is set to launch Amazon well past its 60% revenue rise from Prime Day last year. The e-commerce giant heads into the event this year with officially, 100 million Prime members worldwide and unlike last year, as the owner of grocery chain Whole Foods. But more than ever, Amazon faces competition from other retailers, which are less inclined to cede the retail dog days of summer to their e-commerce rival.
To counter the first-ever Prime Day, Walmart attempted to snark its way into the limelight and was one of just a few attempting to counter Amazon's event. But this year there are a host of retailers charging up promotions, leaving savvy shoppers to price compare and ensure that Amazon really is the best deal even on its big day.
That was inevitable, according to Moody's Investors Service Lead Retail Analyst Charlie O'Shea. "More so than ever, we expect other retailers to roll out a heavy dose of promotions ahead, during, and after Prime Day in hopes of attracting shoppers and dollars, with some of the more challenged retailers facing the tough decision of how low to go," he said in comments emailed to Retail Dive.
- Retail Dive As Amazon expands, how should brands react?
Follow Daphne Howland on Twitter